Challenges Of Industrial Relations In The Context Of Pluralism And Neo-Liberalism

Industrial Relations

Question:

Discuss about the Work and Industrial Relations Towards a New Agenda.

Changes cannot be avoided in life as well as at the workplace, and it has the potential to ensure growth and progress. However, in number of cases changes at workplace result in failure. Generally, changes are incorporated and expected, such as moving from one premises to another premises.

This paper discuss the challenges discussed by Heery, Bacon, Blyton, and Fiorito in context of ‘pluralism’ frame of industrial relations scholarship, particularly in ‘neo-liberalism’ conceptualizations of the contemporary workplace and its economic, political and social environments. This is done with the help of actual example and we also discuss industrial relations alignments identified by Heery and others. Lastly, paper is concluded with brief conclusion which defines key points of this essay.

Industrial relations is the term which is generally used for the purpose of describing the nature and quality of the relationships between the labor and management in the organization. In other words, it defines the perception of the members of the organization about the norms, conduct, practice, and atmosphere related to the relationship of union and management in the workplace (Dastamalchian, 2008).

From last two decades, level of competition is increased in the economy, and for survival it becomes necessary for the organizations to restructure their arrangements and procedures related to work. Changes must be made by the organizations in relations to labor and management for the purpose of improving the performance of the organization.

This area attracts the interest of academics and practitioners, and they try to find out the ways through which management and labor can develop the co-operative relationships in the hope of leading to more mutually beneficial industrial relations arrangements (Silva, 1997).

Institutions are considered as central part of the industrial relations analysis for the purpose of understanding the behavior of participants of IR, and also for understanding the results of IR processes. Within the IR tradition, the most influential accounts related to institutional effects have been merged with a broadly functionalist sociology (Lansbury, 2009).

Institutional structures in context of collective bargaining by workers (mainly by trade unions) play important role in the performance of the labor markets. All institutions which include agencies of government,   corporations and trade unions face issue between fulfilling the obligations towards those on whose behalf these institutions are established such as voters, customers, investors, workers and interest of corporations. It is referred as principal-agent problem by the economists; the universal issue for ensuring that organizations are conducts actions for providing benefit to the intended beneficiaries (Heeery, 2016).

Almost two decades ago, Australia initiated a process of decentralizing in context of power and control in workplace bargaining to the level of enterprise. This is the part of large process which mainly aims at increasing the pressure of competition in the economy of Australia, and it also improves the flexibility, responsiveness, and productivity. Increase in competition also pressurizes the organizations to innovate and develop new products, services, and technologies. This mainly happens because competition creates a heavy penalty for the organization for not serving the interest of their customers and investors such as investors and customers switch the organizations which result in income loss, bad reputation, etc (Cullinane, 2014).

Challenges of Industrial Relations

However, increase in competition also increases the performance and this becomes universal principle on the part of employers, but this philosophy is not accepted by the collective bargaining institutions.

Different powers and rights establish the position of insiders within the trade as it also decrease the pressure on the agents and trade unions officials for the purpose of serving the interest of the ‘principals’ – workers. In the Australian collective bargaining system, the establishment of insiders in the trade union operates mainly by providing default rights to the trade unions. This includes right to act as bargaining agent and also the right to negotiate an award, and it also states the right to handle the default superannuation plan. Such provisions are strengthens by the Fair work laws of Australia. This can be understood through example; the 2012 Act clearly removed the non-union enterprise bargaining stream. The advantaged position of compulsory officials of trade union in context of superannuation funds reduced the pressure on officials to perform.

Government at Federal Level introduce different series of bargaining principles such as restructuring principles, efficiency principle, the Structural Efficiency Principle, and the Enterprise Bargaining Principle. These principles are established by the Industrial Relations Commission in 1991 under the process of decentralize bargaining and workplace reform. Provisions are stated by The Industrial Relations Reform Act 1993 for the purpose of allowing the enterprise bargaining in non-unionized workplaces. The opening up of collective bargaining to workers which are not represented by unions clearly reflect that situations related to wages and employment have been changed without ensuring the direct involvement of unions in the negotiations. Later, provisions related to labor market reforms are introduced by the Workplace Relations Act 1996, and it also provide development of individual worker agreements (Australian Workplace Agreements) as well as continuing collective worker agreements (Certified Agreements). This legislation also provides the facility of the simplification of Awards, and it also took place at the state level for the purpose of encouraging the process of decentralized bargaining and workplace reform.

Historically, percentage of employees in context of trade union membership is ranged between the 42% to 62%, but things changed in 1990 and from that year there is continuous reduction in the numbers. From 1992 to 2016, number of trade union membership is decreased from 40% to 15% (ABS, 2018).

In old times, combined efforts of State and Federal industrial relations legislation mainly aims in encouraging the unionism. The main purpose of the Conciliation and Arbitration Act 1904 was to facilitate and promote the organizations of employers and of employees, and it also facilitates the resolving industrial disputes of organizations through Courts. Critical role is played by the trade unions in the centralized tribunal based system, but the only union which has right to made request in regards of settlement under the Act was 'registered organizations.

Recently, role played by trade unions under the State and Federal workplace relations legislation have been less important. Process of decentralization of power and control provides the opportunity of both collective and individual bargains to those workers who are not represented by the unions, and this also reduces the role of trade unions in the negotiation process of wage. Restriction in context of Federal awards to particular allowable matters has stimulated the workers to fight    for their wages and other employment conditions. In other words, now workers are allowed to bargain for better working conditions, wages, and other rights provided to them.

Decentralization of Power and Control

Generally, arguments related to entrenchment of union rights are stated in legislation such as the Fair Work Act and other similar laws, and these arguments are fall into two types of categories:

• Trade unions ensure good of public if they act on behalf of public, instead of union membership. Arrangements of competitive nature threaten the financial viability of the trade unions, and this impacted all the employees. This is considered as free riding argument.
• Collective strengths are required by employees for effective negotiation with the organizations. Increase competition between the unions increase the number of employees representatives and also reduce the bargaining power of employees (Minerals Council off Australia, 2015).

Above stated literature can be understood with the help of actual example of any organization operated in Australia. Application was filed by Ms. McDonalds to Fair work Commission in 2016 [McDonald [2016] FWC 300 (Fair Work Commission, Commissioner Hampton, 15^th January 2016)]. This application was made for seeking an instruction to restrict bullying under the Fair Work Act (Cth) (Act), and it was dismissed by Commissioner Hampton. In this case, Commissioner Hampton stated that applicant was not considered as worker of the entity. Commissioner further stated that entity itself was not a considered as corporation. For the purpose of obtaining successful orders under the provisions of anti-bullying, it is necessary to satisfy both of these conditions which are stated in the definition of worker.

Ms. McDonalds applied for anti-bullying orders in context of alleged behavior from last five years, and this behavior also result in her elimination from the Cooktown School of Art Society Inc. and its gallery. Throughout this time, she had worked as volunteer with the society. Defendants whose names are stated in the application stated the argument that FWC does not possess jurisdiction to decide the matter. They further stated that plaintiff was not worked as society’s worker under section 789FC of the Act and even society was not a business which is covered by constitution as per the provisions of the Act.

Arguments were submitted by defendants in the form of written submissions; definition stated under section 789FC of the Act was considered by the commissioner and he also reconsiders the definition of worker from the Work Health and Safety Act 2011. It must be noted, volunteer was not defined in the definition of worker in situation person is volunteering to an organization which was completely volunteer with no paid employees (Piper Alderman, 2016).

Commissioner also review the section 789FD of the Act which defines the meaning of bullied at work and also considers the definition of constitutionally-covered business. For the purpose of falling under the definition of business, the business organization must be Constitutional Corporation or a body which is incorporated in a Territory. The society in the application does not fall in any of these categories.

Commissioner also accepted that Ms. McDonald was working as volunteer, and some signs are there volunteer received benefits such as reduced charges of commission. It was argued by the applicant that members get different profits such as free membership for committee members. Commissioner was not prejudiced and by keeping the things simple they stick to the fact that applicant were volunteer and not an employee.

On the basis of above facts, commissioner Hampton stated that no jurisdiction was exercised by the FWC for the purpose of deciding the application, and therefore application was dismissed by the FWC on the ground that applicant was volunteer and not an worker. This example state the status of the person worked in any organization.

There is one more example Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140. Decision of this case highlights the importance on part of organizations to classify the employees correctly. This case also imposes the obligation on employers to meet the necessary requirements stated under national employment legislation.

Therefore, it can be said that industrial relations result in big and important changes in the organization, and if organization fails to adopt these changes then it becomes difficult for organizations to survive in the present business environment.

Conclusion:

After considering the above facts, it can be said that the area industrial relations is complex in nature. ABC collects the information for determining the reliability of this area. This paper mainly discusses the changes incorporated by organizations after the development of industrial relations concept. It also highlights the relationship between changes occurred and IR.

Institutional structures in context of collective bargaining by workers (mainly by trade unions) play important role in the performance of the labor markets, and these institutions face issue between fulfilling the obligations towards those on whose behalf these institutions are established such as voters, customers, investors, workers and interest of corporations. For resolving this Australia initiated a process of decentralizing in context of power and control in workplace bargaining to the level of enterprise.

References:

ABS, (2018). Workplace Relations. Available at: https://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/6102.0.55.001~Feb%202018~Main%20Features~Workplace%20Relations~12. Accessed on 20^th February 2018.

Cullinane, N. (2014). Institutions and the Industrial Relations Tradition. In A. Wilkinson, G. Wood, & R. Deeg (Eds.), The Oxford Handbook of Employment Relations: Comparative Employmet Systems (pp. 222-240). Oxford: Oxford University Press.

Dastamalchian, A. (2008). Industrial Relations Climate”, in Blyton, P., Bacon, Nick, Fiorito, J. and Heery E. (eds.) Sage Handbook of Industrial Relations, London: Sage, Ch 29: 548-571. Available at: https://www.researchgate.net/publication/260255646_Industrial_Relations_Climate_in_Blyton_P_Bacon_Nick_Fiorito_J_and_Heery_E_eds_Sage_Handbook_of_Industrial_Relations_London_Sage_Ch_29_548-571. Accessed on 20^th February 2018.

Fair Work Ombudsman v Crocmedia Pty Ltd [2015] FCCA 140.

Heeery, E. (2016). British industrial relations pluralism in the era of neoliberalism. Available at: https://journals.sagepub.com/doi/pdf/10.1177/0022185615598190. Accessed on 20^th February 2018.

Lansbury, R. (2009). Work and Industrial Relations Towards a New Agenda. Available at: https://www.erudit.org/en/journals/ri/2009-v64-n2-ri3404/037924ar/. Accessed on 20^th February 2018.

McDonald [2016] FWC 300.

Minerals Council of Australia, (2015). Australia’s workplace relations framework: Institutional considerations. Available at: https://www.minerals.org.au/file_upload/files/publications/Workplace_Relations_Framework_Policy_Paper_FINAL.pdf. Accessed on 20^th February 2018.

Piper Alderman, (2016). The Fair Work Commission confirms its anti-bullying jurisdiction does not extend to workers who are not employees - Feb 2016. Available at: https://www.piperalderman.com.au/publications/employment-relations/article/7613. Accessed on 20^th February 2018.

Silva, S. (1997). The Changing Focus of Industrial Relations and Human Resource Management. Available at: https://www.ilo.org/public/english/dialogue/actemp/downloads/publications/srsirhrm.pdf. Accessed on 20^th February 2018.